If you are a student, employee, or entrepreneur, how do you save for your future, are you a big spender?

If saving and managing your earnings or allowance have not cross your mind yet, then this is the right time to do so. The basic principle of finance is the “Time Value of Money”. It means that a dollar today is worth more than a dollar tomorrow”. It is vital to understand this concept to make more informed decision about what to do with your money.

According to the survey conducted of SEDCO Holdings and Dubai-based online finance group, with the sample of 2,000 respondents, which included Saudi citizens and expatriates.

Nearly half of all people living in Saudi Arabia have no savings and just 17% of people in the Kingdom have saved less than 5% of their income

Analysis

Is it because of inflation? expensive cost of living or inadequate financial literacy? It could be all. Another reason could be the inability to budget and manage the monthly salaries. The figure below shows the Saudi Arabia’s Household Income and Consumption Expenditure:

2013: Almost 98% of the Household Monthly Income are spent and only 2.4% are saved.

2018: Approximately 99% of the Household Monthly Income are spent and only 1.6% are saved.

As the data shows, the household’s monthly income and household monthly consumption expenditure have a little difference. Also, the savings in those five years are insufficient, taken into consideration it declined by 27%.

Saving money is challenging especially when you are saving for a luxury brands, entertainment, and fancy restaurants.

However, you should keep in mind that saving is a matter of self-discipline and a way of building your future.